The system, nicknamed a “pie chart” by a fourth person with knowledge of the thinking, would, in theory, allow a cheaper and more gradual transition away from the fully privatized system that has existed in England since 1989. However, it would also disappoint some campaigners to Burnham’s left, including some trade unions, who want a strong focus on public ownership.
One of the three people cited above, a government official, said: “It is definitely one of the proposals that exists, and it would be a way of moving from the current situation to one where there is greater public control. But it is only one of various things, and there isn’t a favored option at the moment on the wider water sector.” This person added that it is still possible that the government could choose a model without private shareholders.
Another of the three people said: “There are lots of gradations in the middle between fully privatized and fully nationalized. The question is whether it leads the sector to better outcomes.”
‘Strung out for months’
England’s nine water and sewerage companies oversee aging pipework that often leaks, resulting in sewage being discharged into public waterways during heavy rain, prompting public outcry. This year’s drought has triggered repeated instances of thousands of users losing access to tap water, sometimes for days.
Burnham has promised an “end to neoliberalism” and said that in the water industry “the shareholders never lose, the public never win.” But he has also long made clear that he would not fully nationalize the industry, which the government previously estimated would cost £100 billion for England and Wales. Instead, the prime minister vows “greater public control.”
So far he has confirmed little about what this will look like in practice. The Department for Environment, Food and Rural Affairs has been examining the issue over the summer and invited pro-Labour think tanks and campaign groups to discuss the policy, but is still keeping several options on the table and is not expected to make a recommendation imminently.